Fitch affirms six Russia telecoms

Fitch Ratings said it affirmed OAO Centertelecom's, OAO North-West Telecom's, OJSC VolgaTelecom's, OAO Sibirtelecom's, OAO Uralsvyazinform's and OJSC Far East Telecom's long-term foreign-currency issuer default ratings at BB.

Fitch said it revised the outlook on each rating to positive from stable.

The six companies are regional incumbent telecoms operators in Russia, and are all operating subsidiaries of OJSC Svyazinvest, a government-controlled holding company, Fitch said.

The outlook revision reflects an expectation that a pending merger of the six regional incumbent telecom operators and Rostelecom will result in significant operating and financial synergies, the agency said.

The timeline for the corporate reorganization is likely to be brought slightly forward compared with the initial deadline, which increases the probability that merger synergies may be realized sooner than previously estimated, Fitch said.

The new Rostelecom is likely to emerge as a stronger player than the individual regional operators now, the agency said. Consolidation will help to address the long-standing roaming and brand issues and increase economies of scale in this segment, Fitch said.

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